from the regulatory-mess dept

I do a fair amount of traveling, and I've found that one of the more interesting things to do on arriving a new city is to chat with a cab driver about whatever is they feel like talking about. Inevitably, I end up hearing about the absolutely ridiculous bureaucratic nightmares involved with being a taxi driver. Now, you can tell that many of the issues started out as legitimate issues, involving safety and route control, but over time, almost everywhere I've gone, they've turned into pure regulatory capture in an attempt to keep competitors out. We've seen in the past how these sorts of rules have gotten in the way of innovative new startups. There was the situation in Ontario where an operation called PickupPal that set up carpool rides was deemed illegal and fined. Then there was the situation in Tampa, where some startups had started offering "pay what you want" taxi rides, subsidized by advertising, and the existing taxi regulatory committee shut it down.

In the latest example, a company named Ubercab, which lets you use your mobile device to hire a car service/limo (not a taxi) on the go, and handle all the payment through the device, has been ordered to cease & desist. The details are not entirely clear in that report, but it appears the complaint is that this service turns car service/limos into "unlicensed" cabs. Most rules forbid car services from "picking up" rides on the fly. Instead you have to book them ahead of time. But Ubercab allows you to book them on the fly. From what I can tell, it's more expensive than a cab, but cheaper than a normal car service (which makes sense). Now, the SF Metro Transit Authority & the Public Utilities Commission of California, who sent the cease & desist will almost certainly claim it's a "safety issue" or some such nonsense. But, the reality is that it's an attempt to limit competition.

Of course, all this has really done is give Ubercab that much more attention, which they're milking (as they should -- hello Streisand Effect). They're refusing to cease and desist and appear to be poised to fight this. One of the company's founders/investors has said that they'll hire any taxi dispatcher who's fired, though I'm not entirely clear how that fits. If their service focuses on car services/limos, what's that got to do with taxi dispatchers? Either way, this does seem like a case where yet another bureaucracy, fueled by regulatory capture by the industry it regulates, is seeking to block out innovative competition.